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The People's Bank of China (PBC), China's central bank, will take moderate monetary policies to maintain a steady growth of bank loans, promote the development of the interbank market and enhance the reform of domestic financial institutions in the second half of this year, according to a statement publicized yesterday by the bank.
The PBC held a meeting of its branch heads on Monday and yesterday. These high officials summed up their work in the first half of this year and mapped out the strategy for the rest of the year.
According to the statement, bank loans are increasing moderately and the loan structure has improved. The rapid increase in pace for middle and long-term commercial loan issuance has been curbed.
Meanwhile, growth of broad money supply, or M2, which covers cash in circulation and all deposits, was stable and reasonable in the first half year, according to the PBC.
Experts said a proper M2 pace could help keep the economy sound.
During the rest of the year, the central bank will take steady monetary policies to consolidate the healthy economy and to solve some fundamental problems, the statement said.
The bank will guide commercial lenders to provide financial support to enterprises that have good profitability and can help increase employment.
Favourable policies will be offered to special sectors such as agriculture, medium and small enterprises, and for education.
The foreign exchange regulatory regime will be reformed gradually and the RMB exchange rate will be kept reasonable and steady.
The PBC will promote the development of the interbank market and direct financing. Commercial banks will be encouraged to issue bonds and secure their bank loans.
(China Daily July 20, 2005)
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